Too Much Too Late

The economy is looking up. So what’s up with the big banks.

With the economy gaining some traction one would think that the big banks would be out of the woods. But not yet, according to some. The Wall Street Journal noted that as a result of the Treasury’s tests Citibank and Bank of America each need to raise billions in capital. The banks are disputing these findings, arguing that their capital base is strong. But the market doesn’t seem to agree, with Citi’s and Bank of America’s stock trading off.

While the specific outcome of this debate is up in the air, one thing is certain: change is coming. The old days of using corporate checking accounts to fund mega-investments in wacky securities is over. While a modern financial system needs default swaps and securitization, we’re delivering now even as the economy recovers. Ten years from now our most levered institutions may not even be recognizable.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2014-09-04T18:19:14+00:00 April 29th, 2009|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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